Thailand’s central bank raised its growth forecast for this year, citing rising exports, domestic consumption and investment.
Gross domestic product will increase 4.9 percent from the 4.6 percent predicted in October, while expansion last year is estimated at 5.9 percent, compared with an earlier forecast of 5.7 percent, Assistant Governor Paiboon Kittisrikangwan told a news conference in Bangkok today.
Governor Prasarn Trairatvorakul last month signaled the revision, saying the global economy has bottomed out and shipments should “really grow” in the second half of 2013. Still, Finance Minister Kittiratt Na-Ranong said yesterday exporters will face difficulties if the baht strengthens further.
“We see ongoing growth momentum in exports this year,” Usara Wilaipich, a Bangkok-based economist at Standard Chartered Plc, said before the forecast release. “The baht’s strength should be temporary. We think the risks to growth will remain the key agenda this year and the central bank may reserve room for a further rate cut if unexpected shocks take place.”
The currency touched a 17-month high yesterday and gained about 2.8 percent so far this year, the strongest among 11 Asian currencies tracked by Bloomberg. The baht was unchanged at 29.77 per dollar at 2:48 p.m. Bangkok time.
Prasarn said yesterday capital inflows into short-term securities were driving the currency higher. The central bank is “closely watching” the situation and has measures to deal with the issue if needed, he said.
The central bank maintained its forecast for 2013 export growth at 9 percent, Paiboon said. Overseas sales growth quickened to 26.9 percent in November, the highest in 15 months. The Commerce Ministry will announce December and 2012 figures later this month. The central bank said the economy may expand by 4.8 percent in 2014.
The Bank of Thailand maintained its forecast for inflation this year at 2.8 percent. Core inflation, which is used to guide monetary policy, may be 1.7 percent. The central bank’s target is to keep the core measure below 3 percent.
The monetary authority on Jan. 9 kept its policy interest rate unchanged for a second straight meeting after cutting it twice last year as the economy recovered from the floods of 2011 and global demand for its exports weakened.